giáo trình Organizational behavior 7th by mcshene

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organizational behavior

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s e v e n t h e d i t i o n

Steven L McShane

The University of Western Australia

Mary Ann Von Glinow

Florida International University

organizational behavior

ORGANIZATIONAL BEHAVIOR:

EMERGING KNOWLEDGE, GLOBAL REALITY, SEVENTH EDITION Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121 Copyright © 2015 by McGraw-Hill Education All rights reserved Printed in the United States of America Previous editions © 2013, 2010, and 2008

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Library of Congress Cataloging-in-Publication Data

McShane, Steven Lattimore.

Organizational behavior / Steven L McShane, The University of Western Australia, Mary Ann Von Glinow, Florida International University.—Seventh edition.

pages cm Includes bibliographical references and index.

ISBN 978-0-07-786258-9 (alk paper)—ISBN 0-07-786258-9 (alk paper)

1 Organizational behavior I Von Glinow, Mary Ann Young, 1949- II Title.

HD58.7 M42 2015 658—dc23

2013045419 The Internet addresses listed in the text were accurate at the time of publication The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

www.mhhe.com

Steven L McShaneSteven L McShane is Winthrop Professor of Management at the University of Western Australia (UWA) Business School, where he receives high teaching ratings from stu-dents in Perth, Singapore, Manila, and other cities where UWA has offered its pro-grams He previously taught in the business faculties at Simon Fraser University and Queen’s University in Canada Steve is also a popular visiting speaker, having given dozens of invited talks and seminars in recent years to faculty and students in the United States, China, Canada, Malaysia, India, and other countries.

Steve earned his Ph.D from Michigan State University, where he specialized in nizational behavior and labor relations He also holds a Master’s of Industrial Relations from the University of Toronto and an undergraduate degree from Queen’s University in Canada Steve is a past president of the Administrative Sciences Association of Canada (the Canadian equivalent of the Academy of Management) and served as Director of Graduate Programs in Simon Fraser University’s business faculty He has conducted executive programs with Nokia, TÜV-SÜD, Wesfarmers Group, Main Roads WA, McGraw-Hill, ALCOA World Alumina Australia, and many other organizations

orga-Along with co-authoring Organizational Behavior, Seventh Edition, Steve is lead co-author of Canadian Organizational Behaviour, Eighth Edition (2012), Organisa-tional Behaviour: Asia Pacific, Fourth Edition (2013), and M: Organizational Behav-ior, Second Edition (2014) He is also co-author of editions or translations of his organizational behavior books in China, India, Quebec, Taiwan, and Brazil Steve has published several dozen articles and conference papers on workplace values, training transfer, organizational learning, exit-voice-loyalty, employee socialization, wrongful dismissal, media bias in business magazines, and other diverse topics

Steve enjoys spending his leisure time hiking, swimming, body board surfing, canoeing, skiing, and travelling with his wife and two daughters

Mary Ann Von Glinow

Dr Von Glinow is a Knight Ridder Eminent Scholar Chair in International ment, and has been Director of the Center for International Business Education and Research at Florida International University for the past 17 years She is the 2010 to

Manage-2012 President of the Academy of International Business (AIB) and an editor of JIBS

Previously on the Marshall School faculty of the University of Southern California, she has an MBA and a Ph.D in Management Science from The Ohio State Univer-sity Dr Von Glinow was the 1994–95 President of the Academy of Management, the world’s largest association of academicians in management, and is a Fellow of the Academy and the Pan-Pacific Business Association She sits on 11 editorial review boards and numerous international panels She teaches in executive programs in Latin America, Central America, the Caribbean region, Asia, and the U.S

Dr Von Glinow has authored over 100 journal articles and 13 books Her most recent books include Managing Multinational Teams (Elsevier, 2005) and Organiza-tional Learning Capability (Oxford University Press, 1999; in Chinese and Spanish translation), which won a Gold Book Award from the Ministry of Economic Affairs

in Taiwan in 2002 She has also coauthored the popular Organizational Behavior, Sixth Edition, textbook and M: Organizational Behavior, First Edition (McGraw-Hill/Irwin, 2012) She heads an international consortium of researchers delving into “Best International Human Resource Management Practices,” and her research in this arena won an award from the American Society for Competitiveness’ Board of Trustees She also received an NSF grant to study globally distributed work Dr Von Glinow is the 2005 Academy of Manage-ment recipient of the Distinguished Service Award, which is one of the Academy’s three highest honors bestowed.

Mary Ann is consultant to a number of domestic and multinational enterprises, and serves as a mayoral appointee to the Shanghai Institute of Human Resources in China Since

1989, she has been a consultant in General Electric’s “Workout” and “Change Acceleration Program” including “Coaching to Management.” Her clients have included Asia Development Bank, American Express, Diageo, Knight Ridder, Burger King, Pillsbury, Westinghouse, Southern California Edison, Aetna, State of Florida, Kaiser Permanente, TRW, Rockwell Int’l, Motorola, N.Y Life, Amoco, Lucent, and Joe’s Stone Crabs, to name a few She is on the Board of Friends of WLRN, Fielding University, Friends of Bay Oaks, the Pan-Pacific Business Association, and Animal Alliance in Los Angeles She is actively involved in several animal welfare organizations and received the 1996 Humanitarian Award of the Year from Miami’s Adopt-a-Pet

Dedicated with love and devotion to Donna, and to our wonderful daughters, Bryton and Madison

— S L M

Dedicated to Zack, Emma, Googun, Blue, Lucky, Chloe, and Grazia

— M A V G

dedication

Organizations 62 Chapter 4 Workplace Emotions, Attitudes, and

Stress 92 Chapter 5 Foundations of Employee Motivation 122

Chapter 6 Applied Performance Practices 156

Chapter 7 Decision Making and Creativity 186

TEAM PROCESSES

Chapter 8 Team Dynamics 218

Chapter 9 Communicating in Teams and

Organizations 252 Chapter 10 Power and Influence in the Workplace 282

Chapter 11 Conflict and Negotiation in the

Workplace 310 Chapter 12 Leadership in Organizational Settings 340

ORGANIZATIONAL PROCESSES

Chapter 13 Designing Organizational Structures 368

Chapter 14 Organizational Culture 396

Chapter 15 Organizational Change 424

ADDITIONAL CASES

Case 1 A MIR Kiss? 452 Case 2 Arctic Mining Consultants 453 Case 3 Chengdu Bus Group 455 Case 4 Fran Hayden Joins Dairy Engineering 456 Case 5 From Lippert-Johanson Incorporated to

Fenway Waste Management 458 Case 6 From REO to Nuclear to Nucor 459 Case 7 Going to the X-Stream 462 Case 8 The Regency Grand Hotel 464 Case 9 Simmons Laboratories 465 Case 10 Star Enterprises—Rita’s Issues at Work 469 Case 11 Tamarack Industries 470

Case 12 The Outstanding Faculty Award 471

Appendix ATheory Building and Systematic Research Methods 473Appendix B

Scoring Keys for Self-Assessment Activities (available online at www.mhhe.com/mcshane7e) B1

Endnotes EN-1 Photo Credits PC-1 Organization Index I-1 Name Index I-3 Glossary/Subject Index I-24

contents

INDIVIDUAL BEHAVIOR AND PROCESSES

CHAPTER 2 Individual Behavior,

Personality, and Values 30

MARS Model of Individual Behavior and Performance 32

Employee Motivation 33 Ability 33

Role Perceptions 34 Situational Factors 35

Types of Individual Behavior 35

Task Performance 35 Organizational Citizenship 36 Counterproductive Work Behaviors 37 Joining and Staying with the

Organization 37 Maintaining Work Attendance 38

Personality Testing in Organizations 44

Debating Point: Should Companies Use Personality Tests to Select Job Applicants? 44

Values in the Workplace 45

Types of Values 45 Values and Individual Behavior 47 Values Congruence 47

Ethical Values and Behavior 48

Three Ethical Principles 49 Moral Intensity, Moral Sensitivity, and Situational Influences 49

Supporting Ethical Behavior 51

Values Across Cultures 52

Individualism and Collectivism 52 Power Distance 53

Uncertainty Avoidance 54 Achievement-Nurturing Orientation 54

Preface xvi

1

INTRODUCTION

CHAPTER 1 Introduction to the

Field of Organizational Behavior 2

Welcome to the Field of Organizational Behavior! 4

The Field of Organizational Behavior 4

Historical Foundations of Organizational Behavior 5 Why Study Organizational Behavior? 6

Perspectives of Organizational Effectiveness 7

Open Systems Perspective 8

Global Connections 1.1: Zara Relies on Open Systems Thinking for Fast Fashion 9

Organizational Learning Perspective 10 High-Performance Work Practices (HPWP) Perspective 13

Stakeholder Perspective 14 Connecting the Dots: Organizational Effectiveness and Organizational Behavior 16

Contemporary Challenges for Organizations 17

Globalization 17 Increasing Workforce Diversity 18 Emerging Employment Relationships 20

Anchors of Organizational Behavior Knowledge 22

The Systematic Research Anchor 23

Debating Point: Is There Enough Evidence to Support Evidence-Based Management? 24

The Multidisciplinary Anchor 24 The Contingency Anchor 25 The Multiple Levels of Analysis Anchor 25

The Journey Begins 25

Chapter Summary 26 Key Terms 26 Critical Thinking Questions 27

Case Study: Improving Health by Getting Lean 27

Web Exercise: Diagnosing Organizational Stakeholders 28

Self-Assessment: It all Makes Sense? 28

Team Exercise: Personal and Organizational Strategies for Developing a Global Mindset 89

Self-Assessment: How Much Does Work Define Your Self-Concept? 90

CHAPTER 4 Workplace Emotions, Attitudes,

and Stress 92

Emotions in the Workplace 94

Types of Emotions 94 Emotions, Attitudes, and Behavior 95

Debating Point: Is Having Fun at Work Really

a Good Idea? 98 Managing Emotions at Work 99

Emotional Display Norms Across Cultures 100 Emotional Dissonance 100

Organizational Commitment 108

Consequences of Affective and Continuance Commitment 109 Building Organizational Commitment 109

Work-Related Stress and Its Management 110

General Adaptation Syndrome 110 Consequences of Distress 111 Stressors: The Causes of Stress 112

Global Connections 4.1: Working to Death in China 113

Individual Differences in Stress 114 Managing Work-Related Stress 114

Chapter Summary 116 Key Terms 117

Case Study: Rough Seas on the LINK650 117

Class Exercise: Strengths-Based Coaching 118

Team Exercise: Ranking Jobs on Their Emotional Labor 119

Self-Assessment: Are You in Touch with Your Emotions? 120

CHAPTER 5 Foundations of Employee

Motivation 122

Employee Engagement 124 Employee Drives and Needs 125

Individual Differences in Needs 126 Maslow’s Needs Hierarchy Theory 127

Global Connections 2.1: Working with High Power

Distance in China 54

Caveats About Cross-Cultural Knowledge 55

Cultural Diversity Within the United States 55

Chapter Summary 56

Key Terms 56

Critical Thinking Questions 57

Case Study: Pushing Papers Can Be Fun 57

Class Exercise: Test Your Knowledge

of Personality 58

Class Exercise: Personal Values Exercise 59

Team Exercise: Ethics Dilemma Vignettes 59

Self-Assessment : Are You Introverted

or Extroverted? 60

CHAPTER 3 Perceiving Ourselves and Others

in Organizations 62

Self-Concept: How We Perceive Ourselves 64

Self-Concept Complexity, Consistency, and Clarity 64

Self-Enhancement 66

Self-Verification 67

Self-Evaluation 67

The Social Self 68

Self-Concept and Organizational Behavior 69

Perceiving the World Around Us 70

Perceptual Organization and Interpretation 72

Specific Perceptual Processes and Problems 73

Awareness of Perceptual Biases 81

Debating Point: Do We Need Diversity Training

Programs? 81

Improving Self-Awareness 82

Meaningful Interaction 83

Global Connections 3.1: Experiencing Meaningful

Interaction on the Front Line 84

Global Mindset: Developing Perceptions Across

Borders 84

Developing a Global Mindset 85

Developing a Global Mindset Through Immersion 86

Chapter Summary 86

Key Terms 87

Critical Thinking Questions 87

Case Study: Hy Dairies, Inc 88

Web Exercise: Diversity & Stereotyping on Display in

Corporate Websites 89

Contents xi

Job Design Practices 167

Job Design and Work Efficiency 167 Scientific Management 168 Problems with Job Specialization 168

Job Design and Work Motivation 169

Core Job Characteristics 170

Global Connections 6.2: Customer Talks Raise Task Significance and Identity 171

Critical Psychological States 171 Individual Differences 171 Social and Predictability Job Characteristics 172

Job Design Practices that Motivate 172

Job Rotation 172 Job Enlargement 173 Job Enrichment 173

Chapter Summary 180 Key Terms 181 Critical Thinking Questions 181

Case Study: Yakkatech, Inc 181

Team Exercise: Is Student Work Enriched? 182

Self-Assessment: What Is Your Attitude Toward Money? 184

CHAPTER 7 Decision Making and Creativity 186

Rational Choice Paradigm of Decision Making 188

Rational Choice Decision-Making Process 189 Problems with the Rational Choice Paradigm 190

Identifying Problems and Opportunities 190

Problems with Problem Identification 191

Global Connections 7.1: Famous Missed Opportunities 192

Identifying Problems and Opportunities More Effectively 193

Searching for, Evaluating, and Choosing Alternatives 193

Problems with Goals 193 Problems with Information Processing 193 Problems with Maximization 195

Evaluating Opportunities 196 Emotions and Making Choices 196 Intuition and Making Choices 198 Making Choices More Effectively 198

Implementing Decisions 199

Learned Needs Theory 128 Four-Drive Theory 130

Expectancy Theory of Motivation 133

Expectancy Theory in Practice 134

Organizational Behavior Modification and Social Cognitive Theory 136

Organizational Behavior Modification 136

Global Connections 5.1: Reinforcing Work Behavior Through Gamification 138

Social Cognitive Theory 138

Goal Setting and Feedback 139

Balanced Scorecard 141 Characteristics of Effective Feedback 141 Sources of Feedback 143

Evaluating Goal Setting and Feedback 144

Case Study: Predicting Harry’s Work Effort 150

Case Study: Cincinnati Super Subs 151

Class Exercise: Needs Priority Exercise 152

Class Exercise: The Learning Exercise 153

Team Exercise: Bonus Decision Exercise 153

Self-Assessment: Need Strength Questionnaire 154

CHAPTER 6 Applied Performance

Improving Reward Effectiveness 163 Debating Point: Is It Time to Ditch the Performance Review? 164

Link Rewards to Performance 164 Ensure That Rewards Are Relevant 165 Use Team Rewards for Interdependent Jobs 165 Ensure That Rewards Are Valued 165

Watch Out for Unintended Consequences 165

Global Connections 6.1: When Rewards Go Wrong 166

Virtual Teams 239 Debating Point: Are Virtual Teams More Trouble Than They’re Worth? 240

Success Factors for Virtual Teams 241

Team Decision Making 241

Constraints on Team Decision Making 242 Improving Creative Decision Making in Teams 243 Brainstorming 243

Chapter Summary 245 Key Terms 245 Critical Thinking Questions 246

Case Study: ArbreCorp Ltée 246

Team Exercise: Team Tower Power 247

Team Exercise: Human Checkers 248

Team Exercise: Mist Ridge 249

Self-Assessment: What Team Roles Do You Prefer? 250

CHAPTER 9 Communicating in Teams

Global Connections 9.1: Good-Bye E-Mail, Hello Social Media! 259

Workplace Communication Through Social Media 260 Nonverbal Communication 261

Choosing the Best Communication Channel 262

Social Acceptance 262 Media Richness 263 Communication Channels and Persuasion 265

Communication Barriers (Noise) 266

Information Overload 267

Cross-Cultural and Gender Communication 268

Nonverbal Differences Across Cultures 268

Global Connections 9.2: Politely Waiting for Some Silence 269

Gender Differences in Communication 269

Improving Interpersonal Communication 270

Getting Your Message Across 270 Active Listening 271

Improving Communication Throughout the Hierarchy 272

Workspace Design 272 Internet-Based Organizational Communication 272 Direct Communication With Top Management 273

Evaluating Decision Outcomes 199

Escalation of Commitment 200

Evaluating Decision Outcomes More Effectively 201

Creativity 201

The Creative Process 202

Characteristics of Creative People 203

Organizational Conditions Supporting Creativity 205

Activities That Encourage Creativity 205

Employee Involvement in Decision Making 206

Debating Point: Should Organizations Practice

Democracy? 207

Global Connections 7.2: Brasilata, the Ideas

Company 208

Benefits of Employee Involvement 208

Contingencies of Employee Involvement 209

Chapter Summary 210

Key Terms 211

Critical Thinking Questions 211

Case Study: Employee Involvement Cases 212

Team Exercise: Where in the World Are We? 213

Class Exercise: The Hopping Orange 216

Class Exercise: Creativity Brainbusters 216

Self-Assessment: Measuring Your Creative Personality 216

TEAM PROCESSES

CHAPTER 8 Team Dynamics 218

Teams and Informal Groups 220

Informal Groups 222

Advantages and Disadvantages of Teams 223

The Challenges of Teams 224

A Model of Team Effectiveness 225

Organizational and Team Environment 225

Team Design Elements 226

Contents xiii

CHAPTER 11 Conflict and Negotiation

in the Workplace 310

The Meaning and Consequences of Conflict 312

Is Conflict Good or Bad? 312 The Emerging View: Task and Relationship Conflict 313

Global Connections 11.1: High Cost of On-Board Conflicts 314

Conflict Process Model 316 Structural Sources of Conflict in Organizations 317

Incompatible Goals 317 Differentiation 317 Interdependence 318 Scarce Resources 319 Ambiguous Rules 319 Communication Problems 319

Interpersonal Conflict Handling Styles 319

Choosing the Best Conflict Handling Style 321 Cultural and Gender Differences in

Conflict Handling Styles 323

Structural Approaches to Conflict Management 323

Emphasizing Superordinate Goals 323 Reducing Differentiation 324 Improving Communication and Mutual Understanding 324 Reducing Interdependence 325

Increasing Resources 326 Clarifying Rules and Procedures 326

Third-Party Conflict Resolution 326

Choosing the Best Third-Party Intervention Strategy 327

Resolving Conflict through Negotiation 327

Bargaining Zone Model of Negotiations 328

Debating Point: Is Creating Value Such a Good Negotiation Strategy? 329

Strategies for Claiming Value 329 Strategies for Creating Value 330 Situational Influences on Negotiations 331

Chapter Summary 332 Key Terms 333 Critical Thinking Questions 333

Case Study: Car Wars at Wolfsburg 334

Class Exercise: The Contingencies of Conflict Handling 335

Team Exercise: Ugli Orange Role Play 338

Self-Assessment: What Is Your Preferred Conflict Handling Style? 338

CHAPTER 12 Leadership in Organizational

Debating Point: Should Management Use the Grapevine to Communicate to Employees? 275

Chapter Summary 276 Key Terms 276 Critical Thinking Questions 277

Case Study: Communicating with the Millennials 277

Team Exercise: Active Listening Exercise 278

Team Exercise: Cross-Cultural Communication Game 279

Self-Assessment: Are You an Active Listener? 280

CHAPTER 10 Power and Influence

in the Workplace 282

The Meaning of Power 284 Sources of Power in Organizations 286

Legitimate Power 286 Reward Power 288 Coercive Power 288 Expert Power 288 Referent Power 289

Contingencies of Power 290

Substitutability 290 Centrality 290 Visibility 291 Discretion 291

Debating Point: How Much Power Do CEOs Really Possess? 292

The Power of Social Networks 293

Social Capital and Sources of Power 293 Gaining Power Through Social Networks 294

Consequences of Power 296 Influencing Others 296 Global Connections 10.1: The Art and Science of Managing Your Boss 297

Types of Influence Tactics 298 Consequences and Contingencies of Influence Tactics 301

Organizational Politics 303

Minimizing Organizational Politics 303

Chapter Summary 304 Key Terms 305 Critical Thinking Questions 305

Case Study: Resonus Corporation 306

Team Exercise: Deciphering the Network 307

Team Exercise: Managing Your Boss 308

Self-Assessment: How Do You Influence Coworkers and Other Peers? 308

Forms of Departmentalization 379

Simple Structure 380 Functional Structure 380

Global Connections 13.1: Toyota Shifts Gears from a Functional to Regional Structure 381

Divisional Structure 381 Team-Based Structure 384 Matrix Structure 385 Network Structure 387

Contingencies of Organizational Design 389

External Environment 389 Organizational Size 390 Technology 391 Organizational Strategy 391

Chapter Summary 391 Key Terms 392 Critical Thinking Questions 392

Case Study: Merritt’s Bakery 393

Team Exercise: The Club Ed Exercise 394

Self-Assessment: What Organizational Structure Do You Prefer? 394

CHAPTER 14 Organizational Culture 396

Elements of Organizational Culture 398

Espoused vs Enacted Values 399

Global Connections 14.1: BP’s Espoused vs Enacted Values 400

Content of Organizational Culture 400 Organizational Subcultures 401

Deciphering Organizational Culture Through Artifacts 402

Organizational Stories and Legends 403 Organizational Language 403

Rituals and Ceremonies 403 Physical Structures and Symbols 404

Is Organizational Culture Important? 404

Contingencies of Organizational Culture and Effectiveness 405

Debating Point: Is Corporate Culture an Overused Phrase? 407

Organizational Culture and Business Ethics 408

Merging Organizational Cultures 408

Bicultural Audit 409 Strategies for Merging Different Organizational Cultures 409

Changing and Strengthening Organizational Culture 411

Actions of Founders and Leaders 411 Align Artifacts with the Desired Culture 412 Introduce Culturally Consistent Rewards and Recognition 412

Transformational Leadership Perspective 344

Develop and Communicate a Strategic Vision 344

Model the Vision 346

Encourage Experimentation 346

Build Commitment Toward the Vision 347

Transformational Leadership and Charisma 347

Evaluating the Transformational Leadership Perspective 348

Managerial Leadership Perspective 348

Task-Oriented and People-Oriented Leadership 350

Servant Leadership 350

Path-Goal Leadership Theory 351

Other Managerial Leadership Theories 354

Leadership Substitutes 355

Implicit Leadership Perspective 356

Prototypes of Effective Leaders 356

The Romance of Leadership 356

Competency Perspective of Leadership 357

Debating Point: Should Leaders Really Be Authentic

All the Time? 361

Gender and Leadership 362

Chapter Summary 362

Key Terms 363

Critical Thinking Questions 363

Case Study: A Window on Life 364

Team Exercise: Leadership Diagnostic Analysis 365

Self-Assessment: Do Leaders Make a Difference? 365

ORGANIZATIONAL PROCESSES

CHAPTER 13 Designing

Organizational Structures 368

Division of Labor and Coordination 370

Division of Labor 370

Coordinating Work Activities 371

Elements of Organizational Structure 373

Case Study: TransAct Insurance Corporation 449

Team Exercise: Strategic Change Incidents 450

Self-Assessment: Are You Tolerant of Change? 450

ADDITIONAL CASES

Case 1: A MIR Kiss? 452

Case 2: Arctic Mining Consultants 453

Case 3: Chengdu Bus Group 455

Case 4: Fran Hayden Joins Dairy Engineering 456

Case 5: From Lippert-Johanson Incorporated to Fenway Waste Management 458

Case 6: From REO to Nuclear to Nucor 459

Case 7: Going to the X-Stream 462

Case 8: The Regency Grand Hotel 464

Case 9: Simmons Laboratories 465

Case 10: Star Enterprises—Rita’s Issues at Work 469

Case 11: Tamarack Industries 470

Case 12: The Outstanding Faculty Award 471

Appendix ATheory Building and Systematic Research Methods 473Appendix B

Scoring Keys for Self-Assessment Activities (available online at www.mhhe.com/mcshane7e) B1

Endnotes EN-1 Photo Credits PC-1 Organization Index I-1 Name Index I-3 Glossary/Subject Index I-24

Support Workforce Stability and Communication 412 Use Attraction, Selection, and Socialization for Cultural “Fit” 413

Case Study: Hillton’s Transformation 420

Team Exercise: Organizational Culture Metaphors 421

Class Exercise: Diagnosing Corporate Culture Proclamations 422

Self-Assessment: Which Corporate Culture Do You Prefer? 423

CHAPTER 15 Organizational Change 424

Lewin’s Force Field Analysis Model 426 Understanding Resistance to Change 427

Why Employees Resist Change 428

Unfreezing, Changing, and Refreezing 431

Creating an Urgency for Change 431 Reducing the Restraining Forces 433

Global Connections 15.1: Communicate, Involve, or Change Your People 435

Refreezing the Desired Conditions 436

Leadership, Coalitions, and Pilot Projects 436

Transformational Leadership and Change 436

Global Connections 15.2: Driving Change Through a

“One Ford” Vision 437

Coalitions, Social Networks, and Change 437 Pilot Projects and Diffusion of Change 438

Four Approaches to Organizational Change 440

Action Research Approach 440 Appreciative Inquiry Approach 441

Welcome to the dynamic world of organizational behavior! Knowledge is replacing structure Social media and virtual teams are transforming the way employees interact and accomplish organizational objectives Values and self-leadership are replacing command-and-control management Companies are looking for employees with emotional intelli-gence and team competencies, not just technical smarts

infra-Organizational Behavior, Seventh Edition, is written in the context of these emerging

workplace realities This edition explains how emotions are the foundation of employee motivation, attitudes, and decisions; how social networks generate power and shape com-munication patterns; how self-concept influences individual behavior, team cohesion, and leadership; and how adopting a global mindset has become an important employee charac-teristic in this increasingly interconnected world This book also presents the reality that organizational behavior is not just for managers; it is relevant and valuable to anyone who works in and around organizations

Linking Theory With Reality

Every chapter of Organizational Behavior is filled with examples to make OB knowledge

more meaningful and reflect the relevance and excitement of this field These stories about real people and organizations translate academic theories into relevant knowledge and real- life applications For example, we describe how Hilcorp Energy Company has become one

of the most successful oil and gas companies in the United States through job design and organization-level rewards; how JCPenney’s sales dropped by one-third after its incoming CEO and fellow executives made a series of decision blunders; how Michigan software company Menlo Innovations has an intensive team-based “pair programming” work ar-rangement; how Telstra CEO David Thodey orchestrated a remarkable turnaround of the Australian telecommunications giant; how Deloitte Touche Tohmatsu employees are mo-tivated through innovative game-based positive reinforcement to document client visits and attend online courses; and how online shoe retailer Zappos thrives on a strong corpo-rate culture

These real-life stories appear in many forms Every chapter is filled with photo captions

and in-text anecdotes about work life Lengthier examples appear in Global Connections

features, which “connect” OB concepts with real organizational incidents and situations

Case studies in each chapter also connect OB concepts to the emerging workplace realities

These stories provide representation across the United States and around the planet, ing a wide range of industries—from software to government, and from small businesses to the largest global organizations

cover-Global Focus

From its first edition, this book has been crafted around the reality that we live in a world of increasing globalization The Seventh Edition continues this global focus by introducing the theme in the first chapter and by discussing global and cross-cultural issues in many other chapters Furthermore, every chapter includes truly global examples, not just how American companies operate in other parts of the world Some examples include how Tencent founder and CEO “Pony” Ma Huateng relies on transformational leadership rather than charisma to lead China’s social media revolution; how the MARS model of individual behavior helps Iceland Foods Group in the United Kingdom create a high-performing workforce; how Brasilata in Sao Paulo, Brazil, succeeds through employee involvement and creativity; how the CEO of Alcoa Russia fended off corruption by emphasizing the company’s values; and how DHL Express in Africa succeeds through high employee engagement

preface

Preface xvii

Contemporary Theory Foundation

Organizational Behavior has a solid foundation in contemporary and classic research and

writing, as reflected in the references Each chapter is based on dozens of articles, books, and other sources The most recent literature receives thorough coverage, resulting in what we believe is the most up-to-date organizational behavior textbook available The topics in this book reflect our strong belief that organizational behavior is multi-disciplinary, not aligned mainly with one social science field This book’s references also reveal that we reach out to marketing, information management, human resource management, and other business dis-ciplines for new ideas Our approach is also to focus information that readers value, namely

OB knowledge and practices Consequently, with a few classic exceptions, we avoid writing

a “who’s who” book; most scholars are named in the references, not in the main text

One of the driving forces for writing Organizational Behavior is to provide a faster

con-duit for emerging OB knowledge to reach students, practitioners, and fellow scholars To its credit, this is apparently the first major OB book to discuss the full self-concept model (not just core self-evaluation), workplace emotions, social identity theory, global mindset, four-drive theory, specific elements of social networks, appreciative inquiry, affective events the-ory (but without the jargon), somatic marker theory (also without the jargon), virtual teams, mindfulness in ethical behavior, Schwartz’s values model, employee engagement, learning orientation, workaholism, and several other groundbreaking topics This edition continues this leadership by introducing the latest knowledge on predictors of moral intensity, distin-guishing the two main types of matrix organizational structure, the degrees of virtuality (ranging from in-situ to virtual teams), task interdependence as a contingency in the team cohesion-performance relationship, communicator characteristics that influence coding and decoding, and the social characteristics of job design

Organizational Behavior Knowledge for Everyone

Another distinctive feature of Organizational Behavior is that it is written for everyone in

organizations, not just managers The philosophy of this book is that everyone who works in and around organizations needs to understand and make use of organizational behavior knowledge People throughout the organization—systems analysts, production employees, accounting professionals—are taking on more responsibilities as companies remove layers of management and give the rest of us more autonomy and accountability for our work out-comes This book helps everyone to make sense of organizational behavior, and provides the conceptual tools to work more effectively in the workplace

Active Learning and Critical Thinking Support

We teach organizational behavior, so we understand how important it is to use a textbook that offers deep support for active learning and critical thinking Business school accreditation asso-ciations also emphasize the importance of the learning experience, which further reinforces our attention on classroom activities This Seventh Edition includes almost three dozen case stud-ies in various forms and levels of complexity, as well as four dozen self-assessments, most of which have been empirically tested and validated This book is also a rich resource for in-class activities, some of which are not available in other organizational behavior books, such as the Employee Involvement Cases, Deciphering the (Social) Network, Test Your Knowledge of Personality, Mist Ridge, and the Cross-Cultural Communication Game

Changes to the Seventh Edition

In response to reviews by dozens of organizational behavior instructors and researchers in several countries, there are numerous improvements throughout the book Chapter 8 (teams) and Chapter 12 (leadership) have been significantly revised, and almost every other chapter has noticeable updates and revisions Along with dozens of conceptual improve-ments, this edition has substantially revised the examples All chapter-opening case studies are new or revised Most captioned photos and Global Connections features are new or updated We have also added more than 100 new in-text examples Here are the main con-

ceptual improvements in Organizational Behavior, Seventh Edition:

• Chapter 1: Introduction to the Field of Organizational Behavior—This opening

chap-ter received considerable revision in the previous edition, so this edition has relatively minor refinements and updates, notably regarding the four perspectives of

organizational effectiveness

• Chapter 2: Individual Behavior, Personality, and Values—This edition updates several

topics in this chapter, including new information about organizational citizenship behaviors, elements of task performance, the importance of role clarity, predictors

of moral intensity, and mindfulness in ethical behavior The sections on personality and personal values have also been further refined in several places

• Chapter 3: Perceiving Ourselves and Others in Organizations—This book was

appar-ently the first to discuss the full model of self-concept and its relevance to tional behavior This edition further refines this important topic, including a new exhibit that illustrates the full set of self-concept characteristics and processes

organiza-Other improvements to this chapter are found in the topics on attribution rules, fundamental attribution error, and improving perceptions through meaningful interaction

• Chapter 4: Workplace Emotions, Attitudes, and Stress—This was the first OB book to

discuss theories of emotion (i.e., affective events theory, somatic marker hypothesis, and affect infusion model) and to integrate those concepts with attitudes, motivation, decision making, and other topics This edition continues this tradition by updating information on types of emotions, the relationship between emotions and attitudes, and emotional labor The topics of cognitive dissonance and emotional intelligence outcomes and training have also been updated

• Chapter 5: Foundations of Employee Motivation—This chapter has relatively minor

updating, including some rewriting on employee drives and Maslow’s needs hierarchy

• Chapter 6: Applied Performance Practices—This edition introduces recent job design

knowledge about the social characteristics of jobs as well as the predictability or information processing demands of jobs

• Chapter 7: Decision Making and Creativity—The most noticeable change in this

chapter is that the topic of escalation of commitment is significantly rewritten and updated You will also find minor rewriting and updating on subjective expected utility, problems with problem identification, and a few other topics

• Chapter 8: Team Dynamics—This chapter has been substantially revised and updated

The types of teams are now discussed around the emerging taxonomy of team permanence, skill differentiation, and authority differentiation The team decision-making section has been substantially rewritten, including the addition of brainwriting

as a team structure to improve creative decisions in teams The team environment topic has been rewritten to distinguish environmental resources from drivers of change within teams The task characteristics discussion now points out the tension between task complexity and task ambiguity The virtual teams topic incorporates the emerging concept of virtuality The chapter now outlines two key contingencies

Preface xix

(task interdependence and team norms) in the team cohesion-performance ship The outdated “groupthink” concept has been replaced with overconfidence as a team decision-making constraint The topics of team diversity and team development processes (team identities and mental models) have also been revised

relation-• Chapter 9: Communicating in Teams and Organizations—Along with almost

complete replacement or updating of examples throughout this chapter, this edition refines and updates the topic of effective coding and decoding There is also minor rewriting on the topics of direct communication with top management and work-place communication through social media

• Chapter 10: Power and Influence in the Workplace—The previous edition substantially

revised this chapter (particularly on social networks), whereas this edition has relatively minor changes In particular, the topics of impression management and ingratiation as well as minimizing organizational politics have been rewritten

• Chapter 11: Conflict and Negotiation in the Workplace—This chapter has minor

changes and updated content, particularly on task conflict, emotional stability as a tor that minimizes the link with relationship conflict, and conflict avoidance strategies

fac-• Chapter 12: Leadership in Organizational Settings—This chapter has been completely

reorganized and substantially rewritten Transformational leadership is widely sidered the core perspective on this subject, so we now begin the chapter with the transformational leadership perspective (after the chapter introduction, which also describes shared leadership) The transformational leadership perspective also now includes “encourage experimentation” as one of its four elements The second per-spective, managerial leadership, is described and contrasted with transformational leadership The managerial leadership perspective incorporates earlier behavioral leadership concepts, contemporary contingency leadership theories, and servant leadership The other two leadership perspectives—implicit leadership and leader-ship competencies—have minor updates from the previous edition

con-• Chapter 13: Designing Organizational Structures—This chapter revises and updates

the matrix structure topic, including the two main forms of this structure based and project-based), and specific problems with matrix structures Other parts

(divisional-of this chapter, such as organic structures, received more subtle updating and revision

• Chapter 14: Organizational Culture—The section on changing and strengthening

organizational culture has been revised, particularly with the addition of supporting workforce stability and communication The issue of espoused versus enacted values

is more clearly highlighted

• Chapter 15: Organizational Change—This edition streamlines the discussion on

resistance to change and updates the discussion of why employees resist change

Organizational behavior is a fascinating subject It is also incredibly relevant and valuable,

which becomes apparent while developing a world-class book such as Organizational

Behav-ior, Seventh Edition Throughout this project, we witnessed the power of teamwork, the

ex-citement of creative thinking, and the motivational force of the vision that we collectively held as our aspiration The tight coordination and innovative synergy was evident through-out this venture Our teamwork is even more amazing when you consider that most team members on this project are scattered throughout the United States, and the lead co-author (Steve) spends most of his time on the other side of the planet!

Executive brand manager Mike Ablassmeir led the development of Organizational

Behav-ior with unwavering enthusiasm and foresight Managing development editor Laura Hurst

Spell orchestrated the daily process with superhuman skill and determination, which is ticularly important given the magnitude of this revision, the pressing deadlines, and the 24-hour time zones in which we operated Jennifer Blankenship, our photo researcher, con-tinues to amaze us She tracked down photos that we sought from every corner of the globe

par-Debra Kubiak created a refreshing book design that elegantly incorporated the writing, hibits, anecdotes, photos, and many other resources that we pack into this volume We also extend our thanks to Elisabeth Nevins Caswell for superb copy editing, Katie Klochan for leading the production process like a precision timepiece, and Elizabeth Trepkowski for her excellent marketing and sales development work Thanks to you all This has been a truly wonderful journey!

ex-Several dozen instructors around the world reviewed parts or all of Organizational Behavior,

Seventh Edition, or related editions in other countries over the past few years Their

compli-ments were energizing, and their suggestions significantly improved the final product The following people from U.S colleges and universities provided the most recent feedback for improvements specifically for this edition:

this edition of Organizational Behavior.

Steve also extends special thanks to his students for sharing their learning experiences and assisting with the development of the organizational behavior textbooks he writes in the United States, Canada, and the Asia-Pacific region Along with working with Mary Ann, Steve is honored to work with his other co-authors, including Kevin Tasa (Schulich School

of Business, York University) and Sandra Steen (University of Regina) for the Canadian edition, and Mara Olekalns (Melbourne Business School) and Tony Travaglione (Pro vice-chancellor, Curtin Business University) for the Asia-Pacific edition He also thanks the co-authors of other translations and adaptations Steve is grateful to his colleagues at the University of Western Australia for their support during these changing times But more than anything else, Steve is forever indebted to his wife Donna McClement and to their wonderful daughters, Bryton and Madison Their love and support give special meaning to Steve’s life

Mary Ann would also like to acknowledge the many professionals at McGraw-Hill/Irwin who have worked to make the 7th edition a reality In addition, she would like to thank the many, many students who have used and hopefully enjoyed this book, so a big shout out to all students everywhere who have used and enjoyed previous editions of this book She would also like to thank the faculty and staff at Florida International University, and also her CIBER staff: Sonia, Nathalie, and Sara-Michelle Most importantly though, Mary Ann thanks coauthor Steve McShane for his tireless efforts Finally, Mary Ann would like to thank her family, starting with the immediate ones, Emma, Zack, Googun, Chloe, Lucky, and Blue She would also like to thank John, Rhoda, Lauren, Lindsay, and Christen She also acknowledges the critical role that some very special people play in her life: Janet, Peter M., Bill, Karen, Alan, Danny, Peter W., Letty D., John D, CEK and Jeff, Damian, Debra, Mary T, Linda C., and Susan RW Thanks to you all!

DEBATING POINTS

Debating Point boxes help students to think critically and

to recognize that even seemingly obvious ideas have logical counterarguments Debating Points also raise the bar by focusing on topics that are central to the world of work.

debating point

IS THERE ENOUGH EVIDENCE TO SUPPORT EVIDENCE-BASED MANAGEMENT?

One of the core anchors of organizational behavior is that knowledge must be built on a solid foundation of scientifically based research This evidence-based management (EBM) approach particularly embraces scientific methods—relevant measures, appropriate sampling, systematic experimental de- sign, and the like—because they produce more valid theories to guide management decisions Scholars also advise managers to become more aware of these well-studied cause-effect princi- ples, and to use diagnostic tools (such as surveys and check- lists) to effectively apply those principles in the workplace

Invariably, supporters of the evidence-based management movement contrast this systematic approach with reliance on management fads, hyped consulting, or untested personal men- tal models.

It seems obvious that we should rely on good evidence rather than bad evidence (or no evidence at all) to make sound decisions

in the workplace Yet there is another side to this debate 92 The question isn’t whether good evidence is valuable; it is about the meaning of “good evidence.” One concern is that scholars might

be advocating an interpretation of good evidence that is far too narrow They typically limit evidence to empirical research and consider qualitative information “anecdotal.” Albert Einstein tried

to avoid this questionable view by keeping the following message framed on his wall: “Not everything that can be counted counts, and not everything that counts can be counted.”

Another concern is that managers don’t view organizational research as particularly relevant to the issues they face 93 This partly occurs because academic journals usually set very high standards for studies, requiring uncontaminated, quantifiable measures in environments that control for other factors But managers do not operate in such pristine conditions Their world is much more complex, with more obscure indicators of key variables One indicator of this research–practice gap is that most organizational studies are correlational, whereas managers typically require knowledge of behavioral interven- tions Only about 2 percent of organizational studies are real-world interventions 94

A third critique of the EBM movement is that the systematic elements of organizational research studies (e.g., sample size, measurement reliability, advanced data analysis methods) sometimes mask other potentially serious faults Cross-cultural studies, for example, often use college student samples to rep- resent an entire culture Lab studies with students assume they replicate workplace conditions, without considering substan- tial differences in skills and team dynamics between the two settings Indeed, some meta-analyses report substantially dif- ferent results of studies using students versus employees Fi- nally, even if the published research is valid, it is usually biased because studies with nonsignificant results are much less likely to be published.

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supporting the learning process

AN INTERNATIONAL AUTHOR

TEAM FOR THE GLOBAL

EMPLOYEE

Drawing on their extensive

international teaching and research

experience, the authors have produced

a book that is highly regarded for its

global focus Steve McShane teaches in

Australia and Singapore and gives talks

each year to schools throughout Asia

and North America As Director of

the Center for International Business

Education, Mary Ann Von Glinow

regularly visits and conducts research

in South America, China, and

elsewhere around the world.

REAL-WORLD EXAMPLES BRING OB TO LIFE

Every chapter is filled with examples

to make OB knowledge more meaningful and reflect the relevance and excitement of this field Opening vignettes set the stage; captioned photos depict OB concepts; and Global Connections features present more detailed vignettes.

Working with High Power Distance

in China 97

As the only Westerner in a 50-employee start-up winery in China, Emilie Bourgois soon noticed that Chinese managers seemed to use their power more directly than did European

or American bosses “I was surprised to see that taking the initiative most of the time was seen as rude and as a failure to respect the executives’ authority,” says Bourgois, a public rela- tions professional from Bordeaux, France “At work, everyone had to perform well in their own tasks, but permission was required for anything other than what was expected.”

This high power distance was also apparent in how nese managers interacted with staff “Western-style bosses tend to develop a closer relationship with employees,” Bour- gois suggests “The hierarchy is much more clearly divided in Chinese-dominant companies than it is in foreign ones.”

Chi-Bourgois worked well with her colleagues at the Chinese winery, but she acknowledges that “beyond that, there is still

an important cultural gap.” She is now employed in the Beijing office of executive recruitment firm Antal International, where cultural differences seem to be less pronounced because the company has team building events to improve bonding and mutual understanding.

global connections 2.1

Emilie Bourgois, second from right with coworkers at Antal International in Beijing, discovered in an earlier job that Chinese-dominant companies have higher power distance compared with most Western firms.

SELF-ASSESSMENT

HOW MUCH DOES WORK DEFINE YOUR SELF-CONCEPT?

Work is an important part of our lives, but some people view it as secondary to other life interests, whereas others view work as central to their identity as individuals The following scale estimates the extent to which you view work as a central or not-so-central life interest Read each

of the statements below and decide how accurate each one

is in describing your focus in life Then, use the scoring key

Work Centrality Scale PLEASE INDICATE THE EXTENT TO WHICH YOU AGREE OR DISAGREE WITH EACH STATEMENT BELOW IN DESCRIBING STRONGLY MODERATELY SLIGHTLY SLIGHTLY MODERATELY STRONGLY YOUR FOCUS IN LIFE DISAGREE DISAGREE DISAGREE AGREE AGREE AGREE

Source: R N Kanungo, Work Alienation: An Integrative Approach (New York: Praeger, 1982).

in Appendix B at the end of this book to calculate your results Remember that there are no right or wrong answers

to these questions Also, this self-assessment should be completed alone so that you can rate yourself honestly without concerns of social comparison Class discussion will focus on the meaning of this scale and its relevance to self-concept and perceptions.

1 The most important things that happen in life involve work.

2 Work is something people should get involved in most of the time.

3 Work should be only a small part of one’s life.

4 Work should be considered central to life.

5 In my view, an individual’s personal life goals should be work-oriented.

6 Life is worth living only when people get absorbed in work.

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SELF-ASSESSMENTS

Self-assessments are an important and engaging part of the active learning process This edition features self-assessments in every chapter, including new scales such

as proactive personality, romance

of leadership, work centrality, sensing-intuitive type, and learning goal orientation Most self- assessments are also available online in Connect.

www.downloadslide.net

Organizational Behavior, Seventh Edition, includes a variety of supplemental materials to help

instructors prepare and present the material in this textbook more effectively.

student and instructor support materials

Online Learning Center (www.mhhe.com/mcshane7e)

The Online Learning Center provides instructors with the following teaching tools

INSTRUCTOR’S MANUAL

This is one of the few textbooks for which the authors write the Instructor’s Manual, ensuring

that the instructor materials represent the textbook’s content and support instructor needs

Each chapter includes the learning objectives, glossary of key terms, a chapter synopsis, plete lecture outline with thumbnail images of corresponding PowerPoint slides, and suggested answers to the end-of-chapter discussion questions Also included are teaching notes for the

com-chapter case(s), team exercises, and self-assessments The Instructor’s Manual also provides

complete teaching notes for the additional cases

TEST BANK AND EZ TEST

Updated for this edition, the Test Bank includes more than 2,000 multiple-choice, true/false, and essay questions Each question identifies the relevant learning objective, Bloom’s taxonomy level, AASCB standard for assurance of learning, and difficulty level

In addition, McGraw-Hill’s testing software, EZ Test, allows you to easily query for learning objectives that directly relate to the learning objectives for your course; the reporting features of

EZ Test also enable you to aggregate student results, making the collection and presentation of assurance-of-learning data quick and easy The program provides a means to create tests that are book-specific and even add your own questions Multiple versions of a test can be created, and any test can be exported for use with course management systems such as WebCT and Blackboard or with any other course management system

POWERPOINT PRESENTATION SLIDES

The PowerPoint slides have been prepared by the authors, allowing seamless integration

be-tween the slides and the Instructor’s Manual Each chapter includes more than two dozen slides,

featuring key points, photographs, and figures from the text, as well as teaching tips and notes for using the slides

Student Supplements

Students can access self-graded quizzes and chapter review materials

Video Resources

ORGANIZATIONAL BEHAVIOR VIDEO DVD VOL 2

For instructors who want to incorporate more real-world examples into the classroom, this compilation of video clips features interesting and timely issues, companies, and people re-lated to organizational behavior The clips and teaching notes are also located in the Instructor Center of the Online Learning Center and in the Connect Library Resources

MANAGER’S HOT SEAT

Now instructors can put students in the hot seat with access to an interactive program Students watch real managers apply their years of experience when confronting unscripted issues As the scenario unfolds, questions about how the manager is handling the situation pop up, forcing the student to make decisions along with the manager At the end of the scenario, students watch a post-scenario interview with the manager, to see how their responses matched up with the man-ager’s decisions The Manager’s Hot Seat videos are now available as assignments in Connect

McGraw-Hill Connect Management

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Interactive Applications

Activities for each chapter in the form of drag-and-drop, case analysis, and video cases reinforce key concepts, stimulate critical thinking, and allow students to practice problem-solving in real-istic business situations In addition, Manager’s Hot Seat videos show how real managers handle various situations and give students the opportunity to practice managerial decision making

Students receive immediate feedback and can track their progress in their own report

Detailed results let instructors see at a glance how each student performs and easily track the progress of every student in their course

Instructor Library

The Connect Management Instructor Library is your repository for additional resources to

improve student engagement in and out of class You can select and use any asset that enhances

your lecture The Connect Management Instructor Library includes:

McGraw-Hill Connect Plus Management

Connect Plus Management provides all of the Connect Management features plus an integrated

ebook, allowing for anytime, anywhere access to the textbook, and a powerful search function

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For more information about Connect, go to www.mcgrawhillconnect.com, or contact

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Educators know that the more students can see, hear, and experience class resources, the better they learn In fact, studies prove it With Tegrity Campus, students quickly recall key mo-ments by using Tegrity Campus’s unique search feature This search helps students efficiently find what they need, when they need it, across an entire semester of class recordings Help turn all your students’ study time into learning moments immediately supported by your lecture

Lecture Capture enables you to:

• Record and distribute your lecture with a click of a button

• Record and index PowerPoint presentations and anything shown on your computer so

it is easily searchable, frame by frame

• Offer access to lectures anytime and anywhere by computer, iPod, or mobile device

• Increase intent listening and class participation by easing students’ concerns about note taking Lecture Capture will make it more likely you will see students’ faces, not the tops

of their heads

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AACSB Statement

McGraw-Hill Education is a proud corporate member of AACSB International

Understand-ing the importance and value of AACSB accreditation, the authors of Organizational Behavior,

Seventh Edition, recognize the curricula guidelines detailed in the AACSB standards for

busi-ness accreditation by connecting selected questions in the text and/or the Test Bank to the six general knowledge and skill guidelines in the AACSB standards

The statements contained in Organizational Behavior, Seventh Edition are provided only as a

guide for the users of this textbook The AACSB leaves content coverage and assessment

within the purview of individual schools, the mission of the school, and the faculty While

Orga-nizational Behavior and the teaching package make no claim of any specific AACSB qualification

or evaluation, we have within Organizational Behavior labeled selected questions according to

the six general knowledge and skill areas

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organizational behavior

Introduction to the Field of

Organizational Behavior

After studying chapter 1, you should be able to:

1-1 Define organizational behavior and organizations, and discuss the importance of this field

of inquiry

1-2 Compare and contrast the four current perspectives of organizational effectiveness

1-3 Debate the organizational opportunities and challenges of globalization, workforce diversity,

and emerging employment relationships

1-4 Discuss the anchors on which organizational behavior knowledge is based

chapter

PART 1: INTRODUCTION

uicken Loans is America’s third-largest residential mortgage lender, yet it is almost the antithesis of a traditional financial

boasts a high-involvement, creative, customer-focused, and fun culture “We encourage everyone who works at the company to be curious, look for ways to improve our processes, then take the next step and make the changes a reality,” says one manager

The information technology group takes the creative process one step further through

“Bullet Time,” a half-day event each Monday during which information technology staff work on a project outside their usual duties that benefits the company “You need to provide the freedom and motivation for employees to make a difference” explains Bill Parker, the company’s Innovation Architect

The company invests heavily in employee development, beginning with an intensive two-day orientation program, during which Chair Dan Gilbert and CEO Bill Emerson personally describe the company’s culture and 18 principles (called

“ISMs”) that guide employee behavior Emerson even hands out his e-mail address and personal cell number to keep the communication lines open “I encourage leaders to be accessible because it breeds an inclusive culture,” says Emerson

Quicken Loans’ work environment also supports its work hard–play hard culture

The company’s offices in downtown Detroit (as well as in six other cities) are a riot

of brightly colored walls and furniture, graffiti-painted concrete floors, and unusual spaces for impromptu gatherings and work breaks Surrounded by progress charts and posters highlighting each of Quicken Loans’ “ISMs,” employees take time out to engage in Ping-Pong tournaments, basketball games, Nerfball battles, and costume contests “We’ve done some pretty wild stuff, but people will respond well to that,”

suggests Quicken facilities director Melissa Price “It creates an energy level that an old, tired space doesn’t have.”

Quicken Loans is also recognized for its strong community support, such as reviving Detroit’s central business district, donating time and resources to charities, and assisting employees serving in the National Guard The company isn’t perfect Yet

it is recognized by multiple sources as one of the best financial institutions for

u

l e

i n

be

Q

Quicken Loans has become one of America’s most successful companies through high involvement, a focus on creativity, a strong culture, and other effective organizational behavior practices.

customer service and one of the best places to work in America “There’s so much room for growth,” says Quicken Loans employee Ricardo Williams “No one

in the company limits you to where you’re at.”1

Welcome to the Field of Organizational Behavior!

This opening story about Quicken Loans illustrates some of the important ways that nizations succeed in today’s turbulent environment In every sector of the economy, organi-zations need to employ skilled and motivated people who can be creative, work in teams, and maintain a healthy lifestyle They need leaders with foresight and vision, who support innovative work practices and make decisions that consider the interests of multiple stake-holders In other words, the best companies succeed through the concepts and practices that

orga-we discuss in this organizational behavior book

Our purpose is to help you understand what goes on in organizations, including the thoughts and behavior of employees and teams We examine the factors that make compa-nies effective, improve employee well-being, and drive successful collaboration among coworkers We look at organizations from numerous and diverse perspectives, from the deepest foundations of employee thoughts and behavior (personality, self-concept, com-mitment) to the complex interplay among the organization’s structure and culture and its external environment Along this journey, we emphasize why things happen and what you can do to predict and manage organizational events

We begin this chapter by introducing you to the field of organizational behavior (OB) and why it is important to your career and to organizations Next, this chapter describes the

“ultimate dependent variable” in OB by presenting the four main perspectives of tional effectiveness This is followed by an overview of three challenges facing organizations:

organiza-globalization, increasing workforce diversity, and emerging employment relationships We complete this opening chapter by describing four anchors that guide the development of organizational behavior knowledge

The Field of Organizational Behavior

Organizational behavior (OB) is the study of what people think, feel, and do in and

around organizations It looks at employee behavior, decisions, perceptions, and emotional responses It examines how individuals and teams in organizations relate to each other and

to their counterparts in other organizations OB also encompasses the study of how zations interact with their external environments, particularly in the context of employee behavior and decisions OB researchers systematically study these topics at multiple levels of analysis, namely, the individual, team (including interpersonal), and organization.2

organi-The definition of organizational behavior begs the question: What are organizations?

Organizations are groups of people who work interdependently toward some purpose.3 tice that organizations are not buildings or government-registered entities In fact, many orga-nizations exist without either physical walls or government documentation to confer their legal status Organizations have existed for as long as people have worked together Massive temples dating back to 3500 BC were constructed through the organized actions of multitudes of people Craftspeople and merchants in ancient Rome formed guilds, complete with elected

No-managers More than 1,000 years ago, Chinese factories were producing 125,000 tons of iron each year.4

Throughout history, these and other organizations have consisted of people who communicate, coordinate, and collaborate with each other to achieve common objectives

One key feature of organizations is that they are collective entities They consist of human beings (typically, but not

organizational behavior (OB)

The study of what people think,

feel, and do in and around

organizations.

organizations

Groups of people who work interdependently toward some purpose.

LO 1-1

Chapter One Introduction to the Field of Organizational Behavior 5

necessarily, employees), and these people interact with each other in an organized way This

organized relationship requires some minimal level of communication, coordination, and collaboration to achieve organizational objectives As such, all organizational members have degrees of interdependence with each other; they accomplish goals by sharing materials, in-formation, or expertise with coworkers

A second key feature of organizations is that their members have a collective sense of pose This collective purpose isn’t always well defined or agreed on Although most compa-nies have vision and mission statements, these documents are sometimes out of date or don’t describe what employees and leaders try to achieve in reality Still, imagine an organization without a collective sense of purpose It would be a collection of people without direction or unifying force So, whether it’s providing home loans at Quicken Loans or designing better aircraft at Boeing, people working in organizations have some sense of collective purpose As Steve Jobs, the late cofounder of Apple Inc and Pixar Animation Studios, once said: “A com-pany is one of humanity’s most amazing inventions It’s totally abstract Sure, you have to build something with bricks and mortar to put the people in, but basically a company is this abstract construct we’ve invented, and it’s incredibly powerful.”5

pur-HISTORICAL FOUNDATIONS OF ORGANIZATIONAL BEHAVIOR

Organizational behavior emerged as a distinct field around the early 1940s, but organizations have been studied by experts in other fields for many centuries The Greek philosopher Plato wrote about the essence of leadership Around the same time, the Chinese philosopher Confucius extolled the virtues of ethics and leadership In 1776, Adam Smith discussed the benefits of job specialization and division of labor One hundred years later, the German so-ciologist Max Weber wrote about rational organizations, the work ethic, and charismatic leadership Soon after, industrial engineer Frederick Winslow Taylor proposed systematic ways to organize work processes and motivate employees through goal setting and rewards.6

Until the 1930s, most organizational research and practice tried to improve work efficiency by changing working conditions and job duties Employees’ thoughts and feelings were ignored and considered irrelevant Elton Mayo (left in photo), his research assistant and later professor Fritz Roethlisberger (right), and others at Harvard University adopted a completely different view Their research

at Western Electric Hawthorne Works near Chicago found that employee attitudes, formal team dynamics, informal groups, and supervisor leadership style strongly influenced employee performance and well-being This focus, known as the “human relations”

school, laid the foundation for the field of organizational behavior as we know it today 8

From the 1920s to the 1940s, Harvard professor Elton Mayo and his colleagues lished the “human relations” school of management, which emphasized the study of employee attitudes and informal group dynamics in the workplace Also during that time, political philosopher and social worker Mary Parker Follett advocated new ways of thinking about several OB topics, including constructive conflict, team dynamics, organizational democracy, power, and leadership In the late 1930s, Chester Barnard wrote insightful views regarding organizational communication, coordination, leadership and authority, organizations as open systems, and team dynamics.7 This brief historical tour indicates that OB has been around for

estab-a long time; it just westab-asn’t orgestab-anized into estab-a unified discipline until estab-around World Westab-ar II

WHY STUDY ORGANIZATIONAL BEHAVIOR?

Organizational behavior instructors face a challenge: Students who have not yet begun their careers tend to value courses related to specific jobs, such as accounting and marketing.9

However, OB doesn’t have a specific career path—there is no “vice president of OB”—so students sometimes have difficulty recognizing the value that OB knowledge can offer to their future Meanwhile, students with several years of work experience identify OB as one

of the most important courses Why? Because they have learned through experience that OB

makes a difference to one’s career success OB helps us make sense of and predict the world in

which we live.10 We use OB theories to question our personal beliefs and assumptions and

to adopt more accurate models of workplace behavior

But probably the greatest value of OB knowledge is that it helps us get things done in the workplace.11 By definition, organizations are people who work together to accomplish things, so we need a toolkit of knowledge and skills to work successfully with others Build-ing a high- performance team, motivating coworkers, handling workplace conflicts, influ-encing your boss, and changing employee behavior are just a few of the areas of knowledge and skills offered in organizational behavior No matter what career path you choose, you’ll find that OB concepts play an important role in performing your job and working more effectively within organizations

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how much your personal theories about what goes on in organizations are consistent with current organizational behavior evidence

or-ganizational behavior is for managers Although OB knowledge is critical for effective ment, this book takes the broader view that the ideas presented in this book are valuable for everyone who works in and around organizations Whether you are a geologist, mortgage loan banker, customer service representative, or chief executive officer, you need to understand and apply the many organizational behavior topics that are discussed in this book Most organiza-tions will probably always have managers, and this book recognizes the relevance of OB knowl-edge in these vital roles But we also recognize that all employees are increasingly expected to manage themselves and work effectively with each other in the workplace In the words of one forward-thinking OB writer more than four decades ago: Everyone is a manager.12

OB?” has focused on how organizational behavior knowledge benefits you as an individual

However, OB knowledge is just as important for the organization’s financial health Quicken Loans illustrates this point: Its success has been driven by a strong workplace culture, individual rewards and development, teamwork, creative decision making, visionary leader-ship, and many other organizational behavior practices

Chapter One Introduction to the Field of Organizational Behavior 7

Numerous studies have reported that OB practices are powerful predictors of the organization’s survival and success.13 One investigation found that hospitals with higher levels

of specific OB activities (e.g., training, staff involvement, rewards and recognition) have lower patient mortality rates Another study found that companies receiving “best place to work” awards have significantly stronger financial and long-term stock market performance

Companies with higher levels of employee engagement also have significantly higher sales and profitability (see Chapter 5)

The bottom-line value of organizational behavior is also supported by human capital and investment portfolio studies These investigations suggest that specific OB characteristics (employee attitudes, work–life balance, performance-based rewards, leadership, employee training and development) are important “positive screens” for selecting companies with the best long-term stock appreciation For example, various studies report that a company’s performance is significantly influenced by the quality of its chief executive officer There is plenty of anecdotal evidence of this relationship, including the leadership failures that caused problems at JCPenney and SNC Lavalin.14

Perspectives of Organizational Effectiveness

Apple, Inc and Google, Inc are the two most admired companies in the world, according

to Fortune magazine’s annual list.15 Yet neither of these companies was on anyone’s radar screen a dozen years ago Apple was on life support in the late 1990s, barely clinging on to a few percentage points of market share in the computer industry Google wasn’t even regis-tered as a company It was little more than a computer project by two Stanford PhD stu-dents that was quickly outgrowing the dorm room where their equipment was housed How did Apple and Google achieve their incredible successes? They consistently applied the four perspectives of organizational effectiveness that we discuss over the next few pages

LO 1-2

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to help you learn the four perspectives of organizational effectiveness

Almost all organizational behavior theories have the implicit or explicit objective of ing organizations more effective.16 In fact, organizational effectiveness is considered the

mak-“ultimate dependent variable” in organizational behavior.17 This means that organizational effectiveness is the outcome that most OB theories are ultimately trying to achieve Many theories use different labels—organizational performance, success, goodness, health, com-petitiveness, excellence—but they are basically presenting models and recommendations to help organizations become more effective

Many years ago, OB experts thought the best indicator of a company’s effectiveness was how well it achieved its stated objectives According to this definition, Delta Airlines would

be an effective organization if it met or exceeded its annual sales and profit targets Today,

we know this isn’t necessarily so Any leadership team could set corporate goals that are easy

to achieve but would put the organization out of business These goals also could be left in the dust by competitors’ more aggressive objectives Worse still, some goals might point the organization in the wrong direction Consequently, goal attainment is not part of the orga-nizational effectiveness model in this book

The best yardstick of organizational effectiveness is a composite of four perspectives:

open systems, organizational learning, high-performance work practices, and stakeholders.18

Organizations are effective when they have a good fit with their external environment, are learning organizations, have efficient and adaptive internal subsystems, and satisfy the needs

of key stakeholders Let’s examine each of these perspectives in more detail

organizational effectiveness

A broad concept represented by several perspectives, including the organization’s fit with the external environment, internal subsystems configuration for high performance, emphasis on organizational learning, and an ability to satisfy the needs of key stakeholders.

OPEN SYSTEMS PERSPECTIVE

The open systems perspective of organizational effectiveness is one of the earliest and most

well-entrenched ways of thinking about organizations.19 Indeed, the other major tional effectiveness perspectives might be considered detailed extensions of the open systems model This perspective views organizations as complex organisms that “live” within an ex-

organiza-ternal environment, rather like the illustration in Exhibit 1.1 The word open describes this permeable relationship, whereas closed systems operate without dependence on or interaction

with an external environment

As open systems, organizations depend on the external environment for resources, including raw materials, job applicants, financial resources, information, and equipment The external environment also consists of rules and expectations, such as laws and cultural norms, that place demands on how organizations should operate Some environmental resources (e.g., raw mate-rials) transform into outputs that are exported to the external environment, whereas other re-sources (e.g., job applicants, equipment) become subsystems in the transformation process

Inside the organization are numerous subsystems, such as departments, teams, informal groups, work processes, technological configurations, and other elements Rather like the Rus-

sian matryoshka dolls nested within each other, organizational subsystems are systems with

their own subsystems.20 For example, the Nordstrom department store in Spokane, Washington,

is a subsystem of the Nordstrom chain, but the Spokane store is also a system with its own subsystems of departments, teams, and work processes An organization’s subsystems are orga-nized interdependently so they interact with each other to transform inputs into various out-puts Some outputs (e.g., products, services, community support) may be valued by the external environment, whereas other outputs (e.g., employee layoffs, pollution) are by- products that may have adverse effects on the environment and the organization’s relationship with that environment Throughout this process, organizations receive feedback from the external envi-ronment regarding the value of their outputs and the availability of future inputs

orga-nizations are effective when they maintain a good “fit” with their external environment.22

Good fit exists when the organization’s inputs, processes, and outputs are aligned with the needs and expectations of the external environment There are three ways that companies

Marketing/Sales subsystem

Engineering subsystem

Managerial subsystem

S

ubsyste

su ubsy ystem

Sub

bss

ys te

Purchasing

subsys te

Subsystem

Subsystem

Subsystem

Subsystem

Technological subsystem

Production subsystem

Accounting subsystem

Susys

tem

Culturalsubsystem

Socialization subsystem

S b sys te

Transforming inputs to outputs

EXHIBIT 1.1 Open Systems Perspective of Organizations

open systems

A perspective that holds that

organizations depend on the

external environment for

resources, affect that environment

through their output, and consist

of internal subsystems that

transform inputs to outputs.

Chapter One Introduction to the Field of Organizational Behavior 9

maintain a good environmental fit The most common strategy to fit with the external ronment is to change the company’s products and services, as well as how those outputs are produced Zara, the world’s largest fashion retailer, relies on continuous adaptation to main-tain a good fit with its highly volatile external environment As Global Connections 1.1 de-scribes, the Spanish company receives continuous feedback from each of its 6,000 stores, and then uses that feedback along with ongoing creativity to rapidly design, manufacture, and deliver new styles In contrast, fashion retailers with a poor environmental fit are overstocked with products that few people want to buy and respond slowly to changing preferences

envi-A second way that organizations maintain a good fit is actively managing their external environment Many firms manage their environment through marketing, which attempts to increase demand for their products or services Others gain exclusive rights to particular re-sources (e.g., to sell a known brand) or restrict competitor access to valued resources Still others lobby for legislation that strengthens their position in the marketplace or try to delay legislation that would disrupt their business activities

Zara, the Spanish fashion retail giant, relies on an open systems perspective to achieve success in one of the world’s most volatile industries emileluider.com

Zara Relies on Open Systems Thinking for Fast Fashion

Zara, the world’s largest clothing retailer, thrives in one of the world’s most volatile industries What is its secret to success?

The Spanish flagship brand of Inditex (which also owns Pull &

Bear, Stradivarius, and other brands) has a business model that applies open systems thinking.

In the fashion industry, customer preferences change quickly and have limited predictability Zara maintains a close fit with that turbulent environment by experimenting with nu- merous new styles, receiving almost immediate and continu- ous feedback about which ones are most popular, learning what minor adjustments would make the styles more appeal- ing, and quickly producing and delivering new or revised styles

to match current demand Zara practically invented the notion

of “fast fashion,” whereby the company responds quickly to customer preferences and fashion trends Most other retailers instead produce a limited variety of styles, offer only two or three batches of new designs each year, and require up to six months for those designs to show up in stores.

The nucleus of this open systems process is an aircraft hangar–sized room at Zara’s headquarters in A Coruña, Spain (shown in the photo) In the center of the room is a long line

of facing desks where regional managers from two dozen countries are in daily contact with each of the company’s 6,000 stores in 86 countries Equally important, sales staff are trained to ask customers about why they bought a garment or how a garment could be designed more to their liking These customer comments are then quickly reported back to head- quarters On both sides of the room are designers and other staff who use this continuous store feedback to revise existing styles and spark ideas for new designs.

Suppose several regional managers receive reports that the new line of women’s white jackets is selling slowly; how- ever, customers have told sales staff they would buy that style

of jacket in a cream-color with silkier fabric Designers receive this information and quickly get to work designing a

cream-colored jacket with the preferred material Some gional differences exist, of course, but Zara reports that most

re-of its products are in demand globally Zara also produces limited stocks of a large variety of designs Thus, the company can sample a wider array of market preferences while mini- mizing the problem of having too much inventory In fact, knowing that Zara’s products are constantly changing attracts customers back to the stores more often.

Rapid and rich feedback from stores is vital, but Zara also thrives because of its quick response to that feedback Most fashion retailers rely on independent manufacturers in distant countries that require several months’ lead time to produce a garment Zara uses such low-cost manufacturers to some ex- tent, but half of its garments are made “in proximity” by nearby Spanish companies or companies in Portugal, Morocco, and Turkey Nearby manufacturing costs more, but it often takes less than three weeks for a new design from these nearby sites

to arrive in stores, which receive new stock twice each week 21global connections 1.1

The third way organizations maintain a healthy fit is to change their business or market location In other words, if the external environment is too challenging, organizations move

to a new environment that can sustain them Nucor, the largest steelmaker by market value

in the United States, began as a car and truck manufacturer (under the name REO), then became a steel joist manufacturer, before settling into its current business IBM exited the computer products industry when senior executives (correctly) predicted that selling computers would be less prosperous than the rapidly growing technology services business

more than an organization’s fit with the external environment It also defines effectiveness by how well the company operates internally—that is, how well it transforms inputs into out-

puts The most common indicator of this internal transformation process is organizational

efficiency (also called productivity), which is the ratio of inputs to outcomes.23 Quicken Loans, described at the beginning of this chapter, gained considerable advantage over com-petitors by dramatically increasing its efficiency in processing home loans through online technologies (initially through web pages and more recently through smartphone apps)

Successful organizations usually require more than efficient transformation processes,

however They also need more adaptive and innovative transformation processes.24 ity makes the organization’s transformation process more responsive to changing conditions and customer needs Innovation enables the company to design work processes that are su-perior to what competitors can offer Zara thrives on its adaptability because its internal subsystems continuously revise styles in line with customer preferences The company’s in-ternal subsystems and tight relations with external contractors also are more efficient than competitors’, because new fashion ideas become products on store racks within a few weeks (whereas most fashion companies require several months)

Adaptiv-Finally, internal subsystem effectiveness calls for well-tuned coordination among tems.25 As companies grow, their internal subsystems (divisions, specializations, and the like) become more complex This complexity and clustering increases the risk that informa-tion will get lost, ideas and resources are hoarded, messages are misinterpreted, and rewards get distributed unfairly Subsystems are also interconnected, so small work practice changes

subsys-in one subsystem may ripple through the organization and undermsubsys-ine the effectiveness of other subsystems Consequently, organizations need to maintain an efficient and adaptable transformation process through work procedures, informal communication, and other coor-dinating mechanisms (see Chapter 13)

ORGANIZATIONAL LEARNING PERSPECTIVE

The open-systems perspective has traditionally focused on physical resources that enter the organization and are processed into physical goods (outputs) This focus was representative

of the industrial economy but not the “new economy,” where the most valued input is knowledge.26 According to the organizational learning perspective (also called knowledge

management), organizational effectiveness depends on the organization’s capacity to acquire,

share, use, and store valuable knowledge

orga-nizational learning perspective views knowledge as a resource, and this stock of knowledge

exists in three forms, collectively known as intellectual capital.27 The most commonly

mentioned form of intellectual capital is human capital—the knowledge, skills, and abilities

organizational efficiency

The amount of outputs relative

to inputs in the organization’s

transformation process.

organizational learning

A perspective that holds that organizational effectiveness depends on the organization’s capacity to acquire, share, use, and store valuable knowledge.

intellectual capital

A company’s stock of knowledge, including human capital, structural capital, and relationship capital.

human capital

The stock of knowledge, skills, and abilities among employees that provide economic value to the organization.

Chapter One Introduction to the Field of Organizational Behavior 11

that employees carry around in their heads Human capital has been described as valuable, rare, difficult to imitate, and nonsubstitutable.28 It is valuable because employees help the organization discover opportunities and minimize threats in the external environment Hu-man capital is rare and difficult to imitate, meaning that talented people are difficult to find and cannot be cloned like sheep Finally, human capital is nonsubstitutable, because it can-not be easily replaced by technology

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Because of these characteristics, human capital is a competitive advantage as well as a huge risk for most organizations When key people leave, they take with them some of the most valuable knowledge that makes the company effective.29 Fortunately, some intellectual

capital remains, even if every employee left the organization Structural capital (also called

organizational capital ) includes the knowledge captured and retained in an organization’s

systems and structures, such as the documentation of work procedures and the physical layout of the production line.30 Structural capital also includes the organization’s finished products, because knowledge can be extracted by taking them apart to discover how they work and are constructed (i.e., reverse engineering)

The third form of intellectual capital is relationship capital, which is the value derived from

an organization’s relationships with customers, suppliers, and others that provide added mutual value for the organization It includes the organization’s goodwill, brand image, and combina-tion of relationships that organizational members have with people outside the organization.31

capital through four organizational learning processes: knowledge acquisition, sharing, use, and storage (see Exhibit 1.2).32

Knowledge Acquisition Knowledge acquisition includes extracting information and ideas from the external environment, as well as through insight One of the fastest and most powerful ways to acquire knowledge is by hiring individuals or buying entire com-

panies (called grafting) Knowledge is also acquired by scanning the external environment

and interpreting messages from external sources As was described a few pages ago, Zara heavily relies on environmental scanning through store feedback (as well as watching competitors) to make clothes that the customer wants Quicken Loans also pays close at-tention to customer feedback so it can develop better products and improve the customer service experience “Client feedback provides us great insight into areas where we can improve,” says a Quicken Loans executive.33 A third knowledge acquisition strategy is experimentation Companies receive knowledge through insight as a result of research and other creative processes

Knowledge Sharing Knowledge sharing involves distributing knowledge to others within the organization Although typically equated with computer intranets and digital

repositories, knowledge sharing mainly occurs through structured and informal communication, as well as various forms of learning (e.g., observation, experience, training, practice) Organizational structure, company practices, and cultural values influence how well employees share knowledge with coworkers.34 For example, nickel, alumi-num, petroleum, and iron ore division employees at BHP

structural capital

Knowledge embedded in an organization’s systems and structures.

relationship capital

The value derived from an organization’s relationships with customers, suppliers, and other.